A Florida agent misrepresents the terms of a consumer's existing policy to convince the consumer to drop it and buy a new policy from the agent's insurer. What is this conduct called, and how is it classified under Florida law?

Why A is correct

Under Fla. Stat. 626.9541(1)(l),(aa), twisting — inducing a policyowner through misrepresentation to lapse, surrender, or replace existing coverage — is a first-degree misdemeanor, and it also exposes the agent to an administrative fine of up to $12,500 for a nonwillful violation or up to $187,500 if willful and committed with fraud. The Department of Financial Services prosecutes twisting criminally and administratively because it harms consumers by trading away their incontestability and other policy rights.

Why the other options are wrong

• B) Rebating involves offering inducements not in the contract, not inducing replacement through misrepresentation, and twisting is far more than a civil violation.
• C) Twisting through misrepresentation is expressly prohibited and criminally classified; it is not mere defamation and is not legal.
• D) Twisting is a first-degree misdemeanor; the third-degree felony classification applies to forged or fraudulent signatures on insurance documents.

Memory hook

Twist = mislead to replace = misdemeanor.